It’s going to get messy if the Supreme Court rules to invalidate Obamacare’s financial aid in more than 30 states that use the federal HealthCare.gov. Everybody will blame everybody else.
Many Hill Republicans will say that it’s the White House’s fault: Obama and Democrats passed this flawed law, with no GOP votes. They should reap the consequences.
The Obama administration has long said that it can’t fix anything in the Affordable Care Act without congressional help. All it would take is a one-sentence bill, which Republicans aren’t going to do. Will the GOP really leave millions of Americans on the hook with such an easy solution on the table?
The states seem to be hoping that nobody looks their way, though they too have an answer within their grasp. Wisconsin Gov. Scott Walker exemplified that line of thinking when he said that this was a problem created by Washington—so Washington can deal with it.
Here’s your guide to making sense of the spin in King v. Burwell.
What it could do: Pass a bill.
The simplest option would be to amend the Affordable Care Act to say specifically that all exchanges are eligible for subsidies, a fix which Obama himself has advocated. “Congress could fix this whole thing with a one-sentence provision,” the president said earlier this month.
It could also pass a separate law extending some form of financial assistance to those currently receiving subsidies, while extracting some further concessions from Democrats to craft Obamacare more to their liking. Most of the GOP plans that have been proposed do this: Sen. Ron Johnson’s bill, for example, extends the subsidies while repealing the law’s employer and individual mandates.
In theory, Congress could also pass a full “repeal and replace” law, gutting Obamacare and establishing an entirely new health care system in its place. But Obama’s veto pen looms.
Why it will act: Because no one—Democrat or Republican—wants millions of people to lose their health coverage. Morality aside, the fallout could also have political consequences if the public blames the GOP for the lawsuit and/or Congress for failing to act. Neither party wants it held against them in the 2016 election.
Why it won’t: Because the fierce partisanship that has always surrounded Obamacare will prevent any solution from being passed. Republicans will refuse to do a simple fix, because that would mean allowing Obamacare to continue as is, and Democrats won’t concede central elements of the legislation.
What it could do: To be determined.
The question of how much freedom the administration has to act is already controversial. The White House has insisted from the beginning that there wouldn’t be an easy administrative fix.
“We can’t undo the massive damage,” Health and Human Services Secretary Sylvia Mathews Burwell said recently.
But some outside observers have theorized that the administration could actually do a lot to clean up the King mess on its own (and has been hiding its cards to pressure the Court).
The specifics vary, but the hypothetical plan looks something like this: HHS makes it as easy as possible for states to “establish” an exchange and restart the subsidies. Maybe the governor just signs a piece of paper; maybe the administration “rents” HealthCare.gov to them.
Nicholas Bagley, a law professor at the University of Michigan who supports the White House’s view of the case, even theorized that the administration could interpret many states to have already “established” an exchange without doing anything additional.
Why it will act: Because it would allow the White House to avoid negotiating with Congress and giving up concessions, or risking that lawmakers fail to act.
Why it won’t: Because it legally can’t. The ACA details some very specific things that states need to do to establish an exchange, and HHS might not have the interpretive leeway. Plus, it would require buy-in from the affected states, the majority of which are controlled by Republicans.
What they could do: Set up an exchange.
The King case is a problem for the administration only because not every state established its own exchange, as many initially assumed they would. If states that don’t already have exchanges decide to set one up, the subsidies start flowing again.
The details are a big problem: Will the administration make it as simple as possible? Do states have enough time to act before the subsidies expire? Could governors take executive action, or would state legislatures have to hold special sessions?
But everybody, opponents and supporters alike, agrees that state exchanges authorize the subsidies.
States’ options also depend on whether and how the Court defines a state-based exchange. They might also be able to lease the federal exchange technology, or create regional exchanges, or even use 2017 waivers established by the ACA to cover many of the same people.
“Unless the Court is very prescriptive about what is or is not state-based, there will be room to maneuver here,” said Dan Crippen, executive director of the National Governors Association, speaking at a briefing on the case.
Why they will act: Because they don’t want their residents to lose subsidies and then blame them for failing to act—particularly if HHS streamlines the process as much as it can. A number of states have reportedly met privately to discuss teaming up for a regional exchange.
Delaware and Pennsylvania have already had applications approved by HHS to establish their own exchanges if the King plaintiffs win. New Hampshire is floating a “magic wand” bill that would simply declare its exchange, currently being run through HealthCare.gov, to be a state-based exchange.
Why they won’t: Because of politics and/or pragmatics.
The deepest-red states aren’t likely to do anything that legitimizes or perpetuates Obamacare.
There is also the question of whether they have enough time to act. The justices could stay a decision, but, at best, states might just have a few months to do something—which could require, say, a special legislative session. All of which just puts a solution farther out of reach.
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